With sales of new vehicles hitting the ropes over a combination punch of rising gas prices, sagging home values and a weakening economy, it’s no surprise that automakers are piling on the incentives to help move the metal. These generally take the form of cash rebates, cut-rate financing deals or subsidized leases, and are averaging around $2,500 per model, according to data compiled by Edmunds.com.

Automakers also get creative from time to time, introducing oddball incentives that may range from free iPods, computers or gift certificates to, in the case of the 2009 Volkswagen Routan minivan, $1,500 deposited in a specially created college savings account for those placing pre-orders before August 31.

Then there’s Chrysler Corporation’s highly touted “Let’s Refuel America” program that essentially freezes the price of a gallon of gas for its customers at $2.99 a gallon for three years. The promotion, which runs (as of this writing) through July 7, applies to most purchased or leased Chrysler, Dodge and Jeep vehicles and is good for a maximum of 12,000 miles driven per year, calculated according to a model’s fuel economy rating. Here, a customer uses a specially issued gas card at an eligible gas station that, in turn, charges his or her credit $2.99 per gallon for the transaction.
But things can get complex when buyers are offered a choice of incentives. This leaves smart shoppers no choice but to do a little detective work to determine which affords the best deal.

Let’s, for example, compare current (again, as of this writing) incentives offered on the Jeep Grand Cherokee SUV. Specifically, we’ll look at the popular Limited model fitted with four-wheel-drive and the optional 5.7-liter Hemi V8 engine.

First let’s see how much choosing Chrysler’s discounted fuel program will save buyers on a model the Environmental Protection Agency rates as obtaining 13 mpg in the city and 18 mpg on the highway.

According to the Department of Energy, the national average for a gallon of gas was $3.94 on June 1. The EPA’s fuel-cost calculator (at fueleconomy.gov) estimates that, at that price, it will cost $3,152 to run the SUV for 12,000 miles. At the locked-in $2.99/gallon price this annual outlay drops to $2,392, which amounts to a $760 yearly savings and a total of $2,280 over the 36-month incentive period. Jeep is throwing in an extra $1,000 cash rebate to further sweeten the deal, bringing the total value to $3,280.

However, based on recent history, it’s reasonable to assume petroleum prices could go even higher (according to DOE records, we were complaining that a gallon of gas cost an average $2.23 three years ago). What if fuel averages $5.00 per gallon over the next three years? In that case, the total potential savings (including the cash rebate) leaps to $5,824.

By comparison, Jeep offers a $3,500 customer cash rebate on the same model. If gas prices remain steady, taking the money up front becomes a slightly better deal by $220; if they continue to rise, the cheap-gas program looks a lot better.
What about financing deals? Chrysler Credit offers zero percent financing on a 36-month loan. We’ll assume a nicely outfitted Grand Cherokee Limited would cost around $40,000 out the door, with the buyer financing 75 percent of that amount. Bank Rate Monitor (bankrate.com) pegs the national average rate for a 36-month car loan at 6.79 percent, which would mean $3,243 in interest saved over the three-year financing period, according to the site’s loan-cost calculator, by taking advantage of the zero-interest promotion.

Alternatively, the automaker offers 3.9 percent financing on a 60-month loan that otherwise goes for a national average of 6.77 percent. We calculate going this route will save $3,068 in interest, and have the added bonus of carrying a smaller monthly car payment, albeit for a longer term ($551 versus $833 for the three-year loan).
Of course such figures will vary wildly based on the cost of a given vehicle and its fuel economy, and are subject to a variety of other factors. For starters, Chrysler’s price-freeze plan automatically favors vehicles that get the worst fuel economy, so choosing a more-economical model will reduce the subsidy’s value. Plus, if a buyer drives less than the 12,000 annual mileage threshold during a given 12-month period, a part of the incentive becomes lost altogether.

What’s more, some buyers may not qualify for a cut-rate financing program, while others may need to take a cash rebate to bolster their down payment in order to help qualify for a loan. And leasing rather than buying a vehicle, or paying cash, automatically eliminates a discounted financing option.

Still this is yet another example of why it always behooves car shoppers to do their homework, run the numbers and enter a dealer’s showroom with all pertinent information at hand to ensure they’ll get an unbeatable deal on the new vehicle that best meets their needs.

© CTW Features

With national average fuel prices approaching $4 a gallon, many consumers are clamoring to trade in their current vehicles for smaller, more fuel-efficient ones. But a new study from Consumer Reports warns drivers that downsizing too soon can cost them more in other owner costs than they’ll save at the pump.

Consumer Reports has always encouraged drivers to buy more fuel-efficient vehicles. But if the timing isn’t right, it can cost you more in the long run. An analysis of CR’s exclusive owner-cost data found that it often doesn’t pay to downsize if you’ve only owned your vehicle for three years or less and haven’t paid off the loan, even if the new car’s fuel economy is much better. Consumer Reports’ experts say consumers should typically hold on to their cars at least four or five years to minimize the financial impact of depreciation and finance charges. Owner cost data includes depreciation, fuel usage, interest on financing, insurance, maintenance and repair, and sales tax. A complete analysis and sample trade-in comparisons are available free online.

According to Consumer Reports’ calculations, depreciation makes up about 48 percent of an average owner’s total vehicle costs in the first five years of ownership. Fuel, however, averages only about 21 percent of total costs. Because the greatest depreciation occurs in the first three years, your car costs you less to own overall in the following years. So for a typical, payment-making owner with a 60-month loan, trading in a three-year-old vehicle means you’ve just taken the biggest depreciation hit on your current car and still have a lot of the loan principle yet to pay off. What you’ll save in depreciation costs by holding onto the vehicle for another year or two will net you more money in the long run than you’d save in gasoline with the new car.

“These hidden costs may be the factors you are least likely to focus on when downsizing,” said Rik Paul, automotive editor, Consumer Reports. “After all, depreciation and interest are less tangible costs than the high price for a gallon of gas that slaps drivers in the face with each fill up.”

For example, a 2005 Ford Five Hundred SEL V6 sedan got 21 mpg overall in Consumer Reports’ testing. The 2008 Toyota Prius got 44. Assuming 12,000 miles per year at the current national average for gasoline of $3.75 per gallon, the Ford will cost about $2,000 in gas this year, while the Toyota will cost just $1,000. But factoring in all of the owner costs of trading in the Five Hundred now, the Toyota will cost about $9,000 to own for the first 12 months, while the Ford costs $6,000. That’s a difference of $3,000, or $0.23 per mile.

“Based on today’s numbers, it’s less expensive to tough out another year or two with a gas guzzler than trade-in too early,” Paul said. “However, if gas prices rise past $5 a gallon, large vehicles may see their depreciation accelerate and owners could face new challenges in selling their old model.”

Consumer Reports continues to advise shoppers to buy the highest-rated, most reliable, and safest model with good fuel economy that suits their needs. When it comes time to buy a new model, there are considerable savings and advantages to downsizing, but consumers should understand the full financial impact of the timing for their decision.

Jeff Bartlett, deputy automotive editor, ConsumerReports.org, adds, “While we support the downsizing trend in principle, we caution consumers to look at their long-term owner costs and not rush to make a change they may later regret.”

ConsumerReports.org has recently launched a “Guide to Driving Green” special section (ConsumerReports.org/fuel) with tips on how to improve fuel economy; lists of models with the best fuel economy; guides to the latest hybrids and alternative-fuel vehicles; and powerful tools for searching Consumer Reports’ ratings.

Online subscribers can compare costs for one, three, five, and eight years of ownership from the detailed model pages.

source
www.ConsumerReports.org

1. Never pay top dollar for a brand new car

If it’s got to be a spanking new car rolled out of the showroom, just make sure you don’t pay the full list price. The Kelly Blue Book value  gives you the value of every car. This is the real price that you should then aim to further undercut - and if a dealer won’t discuss a discount, move on to one that will.

Most buyers, particularly in the climate today, should be able to get between 5% and 15% straight off with a bit of shopping around and some mild haggling. It’s good to remember that dealers are generally keener to cut a deal when business is quiet - usually in August or December - or when sales targets need to be met, which is more often than not near the end of a month.

2. Compare trade-in offers

If you are looking to trade in your old car, talk to several dealers and then compare what they call the “cost to switch”. Dealers will often inflate the trade-in price of your old car, but also charge you more for the new model. When weighing up a few offers, simply look at how much money you are going to have to hand over once you’ve swapped cars - that is the true cost of the deal.

3. Buy a used vehicle

The prices of used vehicles are on the average at an all time low. In addition, buying a newly or pre-registered car can save you a tonne of money. Newly owned cars a usually 15 to 20 percent cheaper than new ones. So a car that may have about 5000 miles on the clock could easily be priced about $5000 cheaper

4. Weigh up all your financing options
If the dealer is offering a 0% finance deal, these can be worth taking in a credit crunch - or then again, you may find you pay less by borrowing the money elsewhere and paying cash upfront. A cheaper cash price may more than offset the interest you’ll pay on the loan. It’s worth noting that, in general, dealer-organised finance and insurance is quite a lot more expensive than the same products sourced from conventional suppliers.

And remember, never compare the finance deals that quote the charge per week - always look at the total cost of the loan over the whole period you are being quoted on.

5. Buy your car on the internet

If you know the exact model you want, even bigger savings can be gained from internet-based car brokers. These companies bulk-buy popular models and pass on part of the saving to the customer. They can usually undercut even the most generous of main dealers - saving you $2000 to $5000.

6. Car loans

Get you car loans online, that way you can comparison shop for the best interest rate for your car loan. A difference in one percentage point in interest rate can be over $1000 depending on the price of the car. Companies like Car Down Loan allows you to comparison shop for the best interest rate.

7. Get an outgoing model

Online car brokers can also be a great place to buy “run-out” models that are still new, but which the dealer is having trouble shifting because they are about to be superseded by a newer model. Discounts can easily be as much as 30% on the original list price. These cars may not be the latest models but they are usually packed with extras, and have proven technology that is less likely to let you down.

8. Don’t spend on needless insurance cover

Don’t fall for the old “gap” insurance trick which salespeople are pushing hard at the moment. Online insurance companies like Kenetic Insurance allows you to search for the best insurance rate for your situation

IntelliChoice.com (www.intellichoice.com), the leading source for automotive ownership cost and value analysis, today announced its “Best Deals of the Month” for the month of June for all cars, trucks, and SUVs. Big auto rebates continue to reflect a well-reported steep drop in sales for trucks and SUVs. However, IntelliChoice.com’s June list also showed that rebates can also be found on smaller and more fuel efficient vehicles.

“Our Best Deals of this month are a clear indication that large vehicles, especially Sport Utility Vehicles and trucks, are in crisis mode,” said James Bell, publisher and editor of IntelliChoice.com. “Truck makers continue to offer rebates of more than $3,000 and $4,000 dollars, and for the second month in a row, the Isuzu Ascender is offering one of the highest rebates we’ve seen all year: $7,000. That’s a number that would have been unheard of just a few months ago. All of this cash on the hood is a Catch-22 for buyers, because while they can get an amazing deal on a gas guzzler, they could well feel a squeeze on their wallets when they go to the pump.”

 Bell is quick to point out that all vehicle classes are feeling the impact of the auto market downturn. “A higher rebate is the deciding factor behind more than half of the winners’ classes. The Toyota Yaris Hatchback beat out the MINI Cooper Hatchback in the subcompact class, and the Corolla beat the popular Civic purely due to rebate numbers. This month it should be mentioned that the Lincoln Town Car beat the Infiniti M35 in the luxury class, based on the strength of a $5,000 rebate. That will come as a surprise to many consumers.”

One consistent Best Deal winner not yet impacted by rebates - the Toyota Tacoma. “The Tacoma has long been a mainstay on IntelliChoice.com’s Best Deals list. I’m sure this has something to do with the fact that the Tacoma is a compact pickup truck and people still want utility without the burden of high fuel prices.”

IntelliChoice.com’s “Best Deals of the Month” identify new cars, trucks, and SUVs with the best ownership cost value in 33 respective classes. Selections are based on current car pricing, market conditions and the lowest national manufacturer consumer new car rebate. In addition, IntelliChoice.com uses the latest information from numerous automotive resources to evaluate what it costs to buy, own and operate each new model-year trim line over a five-year basis.

The following “Best Deals” for June 2008 are ranked by vehicle type and size

IntelliChoice.com Helps Consumers Do Their Homework

IntelliChoice.com updates vehicle data several times a month in order to capture the many expiring auto rebates and ongoing incentive programs offered by manufacturers—giving consumers the most up-to-date analysis.

IntelliChoice.com’s “Best Deals” designation enables consumers to identify how car rebates affect a vehicle’s value throughout ownership and not just at the time of purchase. Ownership costs can vary significantly among different trim lines of the same model. Additionally, IntelliChoice.com continuously updates fuel costs based on the latest data from the U.S. Energy Information Administration.

Vehicles designated as “IntelliChoice.com Best Deals of the Month” are typically cars and trucks that have good to great ownership cost values before any manufacturer rebate. A rebate can often turn a good ownership cost value into a great value, and a great value into an “IntelliChoice.com Best Deal of the Month.”

Please visit www.intellichoice.com for more information or to check the auto rebate section of any vehicle report for the most up-to-date incentives.

The all-new Carson Toyota is cleaning house! Stop by on Saturday, June 21 between 7 a.m. and midnight for a one-day-only sales event and save on each and every new 2008/2009 Toyota in stock.
   
“We need to reduce our inventory so this will be one of our biggest sales of the year,” said Marty Brylski, Carson Toyota general manager. “We’re offering hundreds, even thousands of dollars off in discounts on more than 800 vehicles. So if you’ve been thinking about a new car, you really don’t want to miss it!”
   
Special pricing sheets will be handed out to each customer attending so discounted prices can readily be seen on each new Toyota. Pricing sheets will be color coded for each model to correspond with color codes on vehicles for added convenience.
   
Stop by on June 21 or schedule an appointment with a sales manager by calling 800.476.9081 or by logging onto carsontoyota.com/onedaysale.
   
Carson Toyota, located at 1333 E. 223rd Street, has been serving Southern California residents since 1974. Built from the ground up, the all-new Carson Toyota now exceeds 130,000 square feet on 10 acres. The dealership’s expanded state-of-the-art Service and Parts Department and room for 1,000 Toyotas has made it one of the largest in the nation.

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